Bulgaria's business environment and Composite Business Climate Index continue to decline in 2009, according to data published by the National Statistical Institute on Wednesday.

In January, the Composite Business Index declined by 0,6% compared with December 2008, showing that the country continues to be affected by the global financial crisis.The decline is registered for the forth consecutive month, after the initial decrease in October, 2008.

During the first month of the year, Bulgaria's Business Climate in Industry Index also registers a 0,6 % decline compared to December of 2008.

Bulgarian businessmen and managers' opinion about the state of Bulgarian industrial enterprises has worsened compared to December, down by 10,1%, but their expectations for the upcoming six months are more favorable.

The current production activity in the country is seen as declining compared to the previous month along with orders for the local market or for export. Enterprises, however, predict a slow recovery of their activity in the next three months.

Bulgaria's Business Climate in Construction Index continues to drop, but the decline has shown a significant slow down - just 0,6% compared to December of 2008 while the December drop was 12,6% compared to November 2008. The number of orders in the construction sector is declining while the number of debts is increasing, which is fueling further pessimistic prognoses. There is also an expected reduction of the number of employees in the sector.

Compared to previous months, fewer construction companies have indicated competition, material prices, and labor shortage as their major issues, while more have pointed to the insecure business environment, and the declining demand.

The number of construction companies facing financial troubles is steadily going up while managers in the sector predict a reduction of real estate prices.

Bulgaria's Business Climate in Retail Trade Index has declined by 1,3% in January, a significant improvement compared to the 19,4% decline in December.

The deteriorating business environment and the decreasing demand continue to be the main concerns of managers in this sector as well.

Sales in the last three months have slightly gone up. Most mangers expect that prices for services would remain unchanged in the next three months.

The Business Climate in Services Index has almost maintained its December, 2008 levels and has gone down by just 0,2%.

Bulgarian businessmen and managers' opinion about the state of service companies and their forecast for the upcoming six months remain unchanged. Over 70% of them expect that services demand would remain the same in the next three months, while the rest expect an increase. Most managers predict a slight reduction of the number of employees in the sector.

The major concerns of the companies in the services sector remain the competition, flawed economic legislation, insecure economic environment, financial troubles, and insufficient demand. In January, the flaws of economic legislation have increased their negative effects, according to those surveyed.

Most mangers expect that prices for services would remain unchanged in the next three months.

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